25 February 2012

Why Should Greeks Play Chicken with Germany

Did you see this picture on the right?

This is IMF Managing Director talking to Greek Prime Minister Lucas Papademos.

Doesn't her body language summarize succintly the entire freak show?

I know I just posted a nice piece about her but in this case, I am afraid she is with the powerful austerity boys.

Not that it matters but she probably doesn't even have a choice in this matter. The decision to feed Greece to the lions was made elsewhere and regardless of the foolishness of the proposed solution, Very Serious People (VSP) will continue with the game plan.

The Plan

The plan Eurozone ministers agreed upon calls for further austerity measures, budget cuts, salary reductions, slashing benefits and pensions to...wait for it... reduce Greek debt to 120 percent of the country's GDP by 2020.

Really? Seriously?

And the ironic part, almost all the reports I have seen about the plan caution immediately that there is chance this target might not be achieved. Including an internal report from Morgan Stanley that I have seen this morning (no link as it is not a public document) that flatly states that achieving this goal is very improbable. More to the point, Reuter's Felix Salmon and New York Times' Paul Krugman demonstrate that it is pretty much impossible (Salmon finds 159 percent of GP by 2020).

24 February 2012

Mischievous Thoughts on Identity

Two days ago I was in midtown Manhattan and it was Ash Wednesday
Many people with ash crosses on their foreheads moved around me. Some joking, some eating a slice of pizza and some rushing towards their office. In short, an ordinary day except for the cross.

I thought what would have happened if a woman with an obviously Islamic garb and an ash cross on her forehead was walking on Lexington.

Or a nicely bearded Hasidic man sporting an ephemeral cross on his visage.

Where is Sacha Baron Cohen when you need him?

23 February 2012

Syria On My Mind

You probably heard that Marie Colvin, an American journalist working for the Sunday Times and Remi Ochlik, a freelance photo journalist were killed in the Syrian city of Homs. This is both a tragic event and a very sad trend as more and more journalists are losing their lives while covering hot spots.

I am guessing that some observers will think that this could become a turning point as the outrage could be used to both rally the public opinion in favor of a more vigorous policy against Syria and to pressure Russia and China to change their recent Security Council veto.

I understand the rallying pblic opinion bit. Apparently, 106 journalist have so far been killed in Syria (link in French), but since all but one (Gilles Jacquier) were non-Westerners, we never even heard about them. Now two Westerners dying in one day will attract a lot of attention and the cynical element behind it notwithstanding, I understand why it might indeed give politicians more leeway.

The only problem with this is the fact that, these politicians do not want more leeway as they have no desire to start a military intervention in Syria. Libyan example and their victory there (albeit a Pyrrhic one) should not be seen as a relevant case to analyze Syria. In Libya, European powers were jockeying to get their hands on oil and they had a willing militia on the ground doing the actual fighting. And the vast majority of Libyans were very happy to be able to get rid of Qaddafi. There is no such prize in Syria. Its meager oil reserves would not justify even a halfhearted effort. Nor is there a sizable ground force capable of going against Bashar's army.

19 February 2012

Why I Came to Appreciate Christine Lagarde

When Christine Lagarde was appointed IMF Managing Director I was not overly impressed. I assumed that she would do a decent job and I liked the idea of a woman managing the Fund. But I didn't think she would continue her predecessor's push to bring a less conservative perspective to the Fund.

Well, color me impressed.

In the last six months, despite the obvious foolishness of removing money form the economy in the middle of a major recession, the predominant discourse was centered around spending cuts. This was the case in Washington, as illustrated by the debt ceiling debate and the tea party intransigence over any stimulus efforts. And it was the case in Europe as Cameron gleefully shrunk the UK economy, like a medieval physician curing anemia through bloodletting. Not to mention the GIIPS debate and more deflationary policies to destroy these countries.

When this debate was going on, with Krugman the lone dissenting voice and the only Keynesian in the public forum, influential publications like the Economist was lecturing everyone about the need for fiscal discipline and yes, austerity.

Lagarde did something interesting showing her superior political instincts. She praised fiscal discipline and even indicated support for specific austerity programs like the UK's. But on the side, she had the Fund's Director of Fiscal Affairs Cottarelli prepare a report that said that while austerity was a good idea, if too much emphasis was placed in it in the middle of a recession, all future prospects of growth would be jeopardized.

Being a serious report based on econometric data (and coming from a conservative and hardly Keynesian source like the IMF) the report had a major impact on the debate. Everyone could ignore Krugman, Nobel laureate or not. But it was hard to ignore Lagarde as she delivered this message to the world leaders at Davos.

Before that, everyone kept citing Harvard economist Alesina, the only economist in the world to claim his data backed the conclusion that austerity leads to growth, even though his study was criticized, refuted and discredited many times over.

But IMF publishing an authoritative study claiming that while fiscal discipline is a good idea it is best left to better times shut everybody up. Including, to my delight, the Economist.

Maybe it is her more inclusive and less confrontational style that should be credited for this success:
“I don’t know if it’s male versus female, but I am told my management style is more inclusive,” says Lagarde. It has to do with forming a team’s view, having a consensual approach, “‘wasting time’ on occasion” to build consensus so that “you will not need to waste it in convincing people to implement.”

“Even if it means not appearing as decisive—you know, ‘This is my way or the highway’—I don’t work that way,” says Lagarde
In any case, I am quite happy that she managed to modify the terms of the debate on austerity even if only slightly.

And she did it without alienating our Galtian Overloards that perpetuated this dangerous and baseless narrative.

We need more women in high places.

18 February 2012

Canada and Climate Change

BBC reported that the Harper government is muzzling its scientists on climate change.
The allegation of "muzzling" came up at a session of the AAAS meeting to discuss the impact of a media protocol introduced by the Conservative government shortly after it was elected in 2008. 
The protocol requires that all interview requests for scientists employed by the government must first be cleared by officials. A decision as to whether to allow the interview can take several days, which can prevent government scientists commenting on breaking news stories. 

Sources say that requests are often refused and when interviews are granted, government media relations officials can and do ask for written questions to be submitted in advance and elect to sit in on the interview.
As you must have noticed from my usually neutral tone, my goal in life is not to expose hypocrisies or highlight government wrongdoings or be critical of political entities. I simply try to explain their behavior from a different perspective without expressing outrage.

That is because I know that states will behave badly, violently and hypocritically when it suits their purpose or when they have specific interests at stake. It is in their job description.

But this one is just a sad case of a conservative government doing something for the sake of their pathetic ideology and for no good reason other than possibly the childish joy of pissing off progressive people in general. Canada's withdrawal from the Kyoto protocol will not save the country any money (despite the empty words of a former news reader). It will just tarnish the country's stellar image.

Maybe if somebody explained to them in terms conservatives understand like the importance of brands and brand management they might understand the shortsighted stupidity of their actions.

What is even sadder is that they don't even notice the Orwellian irony worthy of Bashar al Assad behind their defense of that silly protocol.
The protocol states: "Just as we have one department we should have one voice. Interviews sometimes present surprises to ministers and senior management. Media relations will work with staff on how best to deal with the call (an interview request from a journalist). This should include asking the programme expert to respond with approved lines."
I know what Montesquieu said about people having the government they deserve but I firmly believe that Canada and Canadian people did not deserve the Harper government.

Regional Implications of Turkish Spygate

Yesterday, I suggested that the crisis around the attempt to criminalize Kurdish opening policy should not be seen as a purge operation between two rival Islamic fractions within AKP.

I am not denying that these two fractions exist as separate entities but I am not convinced of their rivalry over the two main issues that interests this humble soapbox, namely the Palestinian statehood and Kurdish autonomy. As I stated yesterday, far from opposing each other on these issues, they work from the same playbook.

The question remains about the motivation of the special prosecution. I am not in a position to know whether the special prosecutor belonged to a particular political group or was part of that shadowy apparatus people in Turkey like to call "Deep State." But I believe that the subpoena was an attempt to  make a Kurdish opening very difficult.

If that is the case, it would suggest that this would strengthen the validity of my initial hypothesis about plans to solve the Kurdish issue.

Besides that oblique inference, I would offer one more element in my favor.

17 February 2012

What is Happening in Turkey?

I was in Istanbul last week, on a business trip.

Every day, Turkish papers, usually full of provocative pictures and gossipy news items about minor celebrities, devoted their front pages to what they unanimously called, the state crisis.

A special prosecutor subpoenaed the head of the National Intelligence Service (MIT) for having conducted secret talks with PKK, the Kurdish separatist guerrilla army. When he refused, the prosecutor issued an arrest warrant and all hell broke loose.

The top spy went to talk to the President and then to Prime Minister while police executed search warrants for top MIT officials. Needless to say, this has never happened in the history of the republic. And I doubt that it happened anywhere else.

Newspapers main claim was that this was a purge attempt by rival fractions within the state.

I thought that, if true, given Turkey's increasingly central role in the region, this is the kind of problem that could throw the whole Middle East into turmoil.

Yet, there was no mention of it in Western media outlets, as I searched in vain from my hotel room. The first reference to those event was a Reuters piece that popped into my mailbox yesterday with the cryptic title "Turkish opposition blasts new government spy bill."

It is a good summary of the media frenzy but it does not tell us what is happening in Turkey.

First some background.

15 February 2012

More on Hamas

After I posted my previous analysis on Hamas being at a crossroads, the two sides (and their patrons) came out of the closet.

As reported, Haniya went to see Ali Khamenei, who praised him for his intransigent stance towards Israel and lectured him on resistance.
Khamenei's comments come as divisions within Hamas have emerged on a possible overhaul of the organisation's strategy. 
Hamas leader Khaled Meshaal signed an agreement with Palestinian president Mahmud Abbas earlier this month placing Abbas at the head of an interim government charged with organising elections later this year. 
The agreement struck by Meshaal's foreign-based leadership with Abbas's Fatah faction has run into serious opposition from Hamas members inside the Gaza Strip, which the movement has controlled since ousting the president's loyalists in 2007. 
In November, Meshaal called for "peaceful popular resistance," which would respresent a shift in the movement away from armed struggle. 
He also expressed support for the establishment of a Palestinian state on territories occupied in 1967 in the West Bank, Gaza and East Jerusalem as its capital.
As expected, Haniya reaffirmed that Hamas was never going to recognize the existence of Israel:
Haniya was quoted as telling Khamenei that the goal of Hamas remained "freedom of all the Palestinian land from the (Mediterranean) sea to the (Jordan) river, the refusal of peace talks and the Islamic character of the Palestinian struggle." 
On Saturday, Haniya said in a speech in Tehran that Hamas "will never recognise Israel."
While Haniya was going to Iran through Bahrain, at about the same time, Meshaal was talking to the Emir of Qatar and earlier in the month, upon the Emir's urging, he stated that he is ready to accept Mahmoud Abbas as the Prime Minister of a future unified Palestinian state.

That clearly means a radical change of direction for Hamas, as it implies that Hamas is accepting Abbas' flexible stance and softer approach.

Curiously, Haniya initially voiced his support for the unity deal. But, as he was touring Iran and talking to the Supreme Leader, other voices began to be heard:
Senior Hamas official Mahmud Zahar slammed a Palestinian unity deal as a "mistake" that has thrown the Islamist movement into crisis, in an interview with Egypt's official MENA agency published on Sunday. (...)
The deal signed in Qatar ends a long-running disagreement over the premiership that stalled Palestinian reconciliation, but Zahar said that "practically it can not be implemented."
"If the consultations took place among the small circle around the political bureau (headed by Meshaal abroad), then this is unacceptable," he said.
The agreement "needs to be reviewed, so Hamas leaders at home and abroad will meet over the issue in the coming two days."
He said after a series of discussions with Hamas officials and MPs "we found that many feel there is a real crisis."
I am sure Zahar is right and there is a real crisis. And its outcome will have a very profound effect on the forces and events that are shaping the region.

There is another major crisis that is going on right now and although no one is paying attention to it, this one will have even more important consequences. That's next.

05 February 2012

What is Happening with Hamas?

When I read, in January, that Khaled Meshaal, officially the leader of Hamas since the 2004 assassination of its founder Sheikh Ahmed Yassin, was stepping down, I was a bit surprised.

As the BBC reported, though no one knows for sure where he is situated in the organizational hierarchy, for all practical purposes, he was the face of the organization:
Hamas's covert structure means that it is not known whether he has authority over the remaining Gaza hierarchy, but from his position in exile in Damascus, he has played an important role. 
Unhindered by the travel restrictions imposed by Israel on Hamas leaders in Gaza and the West Bank, Mr Meshaal has represented the group at meetings with foreign governments and other parties throughout the world.
Why would he step down, I wondered at the time.

Around the same time, rumors began to float that he was planning to move his Damascus headquarters to either Jordan or Qatar. Meshaal has Jordanian citizenship and King Abdullah seemed rather keen to help the move. And a week after his announcement, Meshaal went to meet with King of Jordan.

What is interesting in all that is the fact both Jordan and Qatar have been pushing for a regime change in Syria, Hamas' protector and Meshaal's current landlord. Moreover, King Abdullah's father made peace with Israel in 1994 and Jordan expelled Hamas in 1999. Why would a sworn enemy of Israel go back to the country that expelled them in the first place.

Clearly, a radical change is taking place.

The same week Meshaal was visiting with King Abdullah, Hamas Prime Minister of Gaza Ismail Haniyeh left to meet with Ahmadinejad.